Christmas is only a week away and I bet there is a growing pile of Christmas presents under your tree. Your kids have already counted the number of presents with their name on the gift tag and are dreaming about what could be inside. Christmas is always a magical time of the year, and it also provides a great opportunity to teach your kids about money.
3 Money Lessons to Teach Your Kids This Holiday
Money lessons don’t need to be boring or lectures (in fact you should avoid making them so) and the holiday season is full of teachable moments to help make learning about money fun and easy.
Lesson 1: Temper Receiving with Giving
Every child looks forward to tearing open their presents Christmas morning, but sadly not every child has something to open. Depending on the age of your child, find a way for them to give back.
They could choose a name from an Angel Tree and help buy gifts for a child. They could donate new toys for a Toys for Tots Drive or donate old toys to Goodwill, The Salvation Army or local shelters.
They can help serve a meal at a soup kitchen or buy groceries for a Food Bank. They can bake Christmas treats and bring them to nursing homes or neighbors without family nearby.
As you do these things, talk about how grateful you are for your many blessings and how good it feels to share with others in need.
Lesson 2: Have Them Buy Gifts on a Budget
Too many adults dislike budgets, which is why I want my daughters to become comfortable using them now, so they see how budgets can be very freeing, rather than restrictive. I believe in giving kids hands-on experience and the holidays provide a great opportunity to have your kids work with a budget.
Give kids a gift budget and help them create a list of people who they plan to buy Christmas gifts for, then divvy up how much they can afford to spend on each person.
Next help them do some comparison shopping before they hit the stores, so they know they are getting the best deal possible. This is a great time to tell them that you shop on a budget too, which is why it’s so important to know what someone truly wants, so you spend your money on what matters most.
Lesson 3: Set Save, Spend and Share Goals with Their Holiday Loot
There is a good chance your kids will receive cash and gift certificates as part of their Christmas bounty, and they will be eager to spend their windfall. While they should buy a highly coveted item or two, I would also use this opportunity to introduce your kids to my save, spend and share concept. I taught my daughters that every time they earn or receive money they have three decisions to make.
1. They can SAVE their money to purchase something later. I ask my girls, “What is worth saving your money for and not spending it right now?” This becomes their long-term save goal. It should be something your children truly desire, is obtainable and motivates them to save their money.
2. They can SPEND their money on something right now. I ask my girls, “What is something you want to spend your money on right now?” Remind your kids there is no rule they have to spend every penny they received, and it may be wise to keep a few dollars in their spend jar for something they find later.
3. They can SHARE their money with someone they love. I ask my girls, “Who is someone you love and want to share your money with?” I want my girls to develop a giving mindset at a young age as I believe sharing enriches our lives. I recommend you start with something fun and tangible, like donating items to a local animal shelter.
As important as it to me that my girls know four quarters equal a dollar, it is more important to me that they understand how to use those four quarters. This is why we set goals, so we can use them to guide our money decisions and make sure we’re spending our money on the things that make our hearts happy. Their holiday loot is great place for them to start and learn how to use their money and gift cards wisely.
Wishing You a Magical Christmas
Christmas is one of my favorite times of the year. It's full of fun, family traditions and good cheer. I still manage to sneak in a few money lessons along the way and I hope you'll do the same with your kids too.
I wish everyone a magical and safe holiday season with your loved ones. Happy Holidays!
Shannon Ryan, CFP® is a Mom on a mission to help busy parents teach their children simple, value-based principles that guide their money decisions and support their long-term financial well-being. Shannon wrote The Heavy Purse to help parents start money conversations with their children through a fun, bedtime story and developed companion workbooks to help deepen those conversations. Visit TheHeavyPurse to learn more on how to raise Money Smart Kids.
Photo courtesy of www.FreeDigitalPhotos.net.